Do Lawyers Have A Duty To Disclose, To The Client, Significant Errors Committed By Co-Counsel?

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Ethics (pd)
This was the question posed to the Committee on Professional Ethics of the New York State Bar Association. Its answer was a qualified yes — counsel has a duty to disclose the alleged error to the client but only if it was a significant error that could give rise to a malpractice claim.

The issue presented to the Committee was the following:

The inquirer was engaged to represent a client on the eve of trial. The client’s prior counsel is serving as co-counsel.  In preparing the case, the inquirer has learned that co-counsel conducted virtually no discovery and made no document requests, although the inquirer believes correspondence and emails between the parties could be critical to the case.  The inquirer believes this was a significant error or omission that may give rise to a malpractice claim against co-counsel. The outcome of the case, however, has yet to be decided. The inquirer is concerned about disclosing this situation to the client because it would undermine inquirer’s relationship with co-counsel, but the inquirer also believes it is in the client’s best interests to disclose the facts as soon as possible.

It is already established in New York (and several other jurisdictions, including New Jersey) that lawyers must report their own significant errors or omissions to clients. This requirement is based partly on Rule 1.4 and partly on Rule 1.7, each of which the Committee discussed in its opinion.

Rule 1.4 requires lawyers to keep clients informed about any material developments in their representation, and to explain issues "to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." A client may decide not to continue to retain a lawyer who makes significant errors or omissions, and the client cannot make an informed decision on this issue unless the lawyer self-reports his own errors. Accordingly, clients must self-report their own significant errors or omissions to their clients. The Committee held that this rationale applied equally to lawyers reporting significant errors or omissions committed by co-counsel because the decision facing the client in both situations was the same — whether to continue to retain the lawyer who committed the errors or omissions — and the client cannot make an informed decision on that issue without full disclosure.

Continue reading “Do Lawyers Have A Duty To Disclose, To The Client, Significant Errors Committed By Co-Counsel?”

Complex Commercial Tenancies Often Test The Limits Of The Summary Eviction Process

Rental Agreement (PD)
I recently co-authored an article, entitled "Commercial Tenancies, Complexities, And The Limits Of the Summary Eviction Process," that discusses, as the title suggests, situations where commercial landlord-tenant matters may be too complicated for the normal, summary eviction process in New Jersey courts. Here are the first few paragraphs:

New Jersey tenants who don't pay, including commercial tenants, may be swiftly dispossessed of their leasehold pursuant to the Summary Dispossess Statute, N.J.S.A.  2A:18-51 to -61 (the "Statute"). The Statute gives landlords the right to seek the removal of tenants who do not pay rent, or who otherwise violate the terms of the lease.  The Statute establishes a summary eviction process, which as its name implies, is "summary" in nature and, among other things, does not provide for formal discovery and typically does not involve issues other than possession.  From the filing of the summary dispossession complaint it is not uncommon for a tenant to be dispossessed within 90 days or less.

However, what happens when a tenant is not paying rent for a valid reason or due to a legitimate dispute with a  landlord? Can that tenant also be summarily dispossessed? Recognizing the limits of a process that by design is "summary" in nature, New Jersey Courts have answered that question "No." The mechanism to stave off the summary dispossession is the motion to transfer to the Law Division, which remedy is exercisable by a court, at its discretion, if the issues are of "sufficient importance" that proceeding in a summary fashion would not do justice. N.J.S.A.  2A:18-60. Typically, matters of "sufficient importance" involve complex issues and/or the need for discovery.

Please check out the full article here

Employer May Be Able To Enforce Arbitration Agreement That Employee Never Signed

Contract
In its recent Seriki v. Uniqlo New Jersey, LLC opinion, the Appellate Division faced the following question: "if an employee does not sign an arbitration agreement, can it still be enforced against him"? (Not quite as philosophical as the famous, "if tree falls in a forest and no one is around to hear it, does it make a sound?" but more relevant to my daily life.) The Appellate Division's answer was a resounding "maybe."

In Seriki, plaintiff worked as a loss-prevention associate for defendant, a retail department store. A few months after he started the job, plaintiff attended a training session at defendant's human resources office. During the meeting, plaintiff and the other attendees received a revised copy of plaintiff's employee handbook. They also received a four-page agreement entitled, "Mutual Agreement to Arbitrate Claims" (the "Agreement"). As the name suggests, the Agreement was a broad agreement to arbitrate all claims between plaintiff and its employees. It also contained the following provision:

Should Employee not sign this Agreement, continuing Employee's employment for a period of [thirty] days after Employee's receipt of this Agreement constitutes mutual acceptance of the terms of the Agreement commencing upon completion of that [thirty]-day period.

Defendant claimed that it explained the Agreement to plaintiff and the other attendees at the meeting. Plaintiff disagreed, claiming that the Agreement was never discussed. Plaintiff did not sign the Agreement, but continued to work for defendant for four months after the meeting. 

After plaintiff was fired, he sued, alleging wrongful discharge. Defendant moved to compel arbitration. The trial court denied the motion, concluding that plaintiff was not bound by the Agreement because he did not sign it. Defendant appealed.

Continue reading “Employer May Be Able To Enforce Arbitration Agreement That Employee Never Signed”

Supreme Court Issues Important Decision On Truth In Lending Act

by: Peter J. Gallagher (@pjsgallagher)

Please check out an article I wrote for law360.com on the U.S. Supreme Court's  recent decision in Jesinoski v. Countrywide Home Loans. Here is the opening paragraph:

On Jan. 13, 2015, the U.S. Supreme Court released its opinion in Jesinoski v. Countrywide Home Loans (No. 13-684) and resolved a circuit split on an important issue arising under the Truth in Lending Act, 15 U.S.C. §1601-1677 (“TILA”). Under TILA, a borrower has the right to rescind certain loans for up to three years after the loan is consummated. To exercise this right, borrowers must “notify the creditor” of their intention to rescind the loan within three years. The question in Jesinoski was whether a borrower satisfies this requirement by sending written notice to a lender of its intent to rescind or whether the borrower must file a lawsuit within the three-year statutory period. In recent years, a circuit split had developed over this issue. In Jesinoski, the Supreme Court resolved this split, holding that written notice is sufficient.

Check out the rest of the article here.